Liberation Management, or Management by Stress?

"Ye shall no more give the people straw to make brick, as heretofore: let them go and gather straw for themselves. And the tale of the bricks, which they did make heretofore, ye shall lay upon them; ye shall not diminish ought thereof...."

From my first reading of Tom Peters' work, my overwhelming impression was of the ambivalent or dialectical character of the "revolutionary" management and organizational trends he championed. Depending on the system of power into which such ideas are incorporated, they could make life either heaven or hell for those doing the actual work.

The same generalization applies to many other organizational and management theory trends (reengineering, lean production, kaizen, and the like), all of which celebrate the dissolution of corporate hierarchies and the organization of production along decentralized, consumer-driven, and (allegedly) bottom-up lines. And indeed, a lot of it sounds like what might be the seeds of a libertarian, self-managed, decentralized economy, if the structural bulwarks to authoritarianism were removed. The same practices, however, when integrated into the existing system of state capitalism, become what Mike Parker and Jane Slaughter [Working Smart: A Union Guide to Participation Programs and Reengineering (Detroit: Labor Notes, 1994)] call "management-by-stress."

The striking thing is that ideas like demand-pull, self-directed teams, and flexible manufacturing are discussed both by corporate management gurus like Peters, and by left-wing economic decentralists, in language that is virtually indistinguishable from one group to the other. The demand-pull concept, for example, was anticipated at least as early as Barry Stein's Size, Efficiency, and Community Enterprise. The difference is that Peters considers such ideas (despite his revolutionary rhetoric) largely in terms of their integration into the existing corporate economy, while the left-wingers imagine a post-corporate economy of producer and consumer cooperatives built around the new practices.

Reading Peters brought another, seemingly obvious, question to mind. In his work of the late '80s and early '90s, he wrote of the dissolution of corporate walls, the elimination of middle management, and the rise of worker self-management as inevitable revolutionary trends that the Fortune 500 would inevitably adopt or die. If the large corporation were not revolutionized along such lines, he wrote, it would go the way of Gosplan. Yet, fifteen or twenty years later, the corporate dinosaur is still thrashing quite vigorously in those alleged tarpits, with no sign of going under. Why didn't the old hierarchical corporation disintegrate to anywhere near the extent Peters predicted, and why isn't the flattened network of self-directed teams anwhere near as prevalent?

One partial answer is that Peters greatly exaggerated the competitive disadvantages of inefficiency in a cartelized, state capitalist market, and underestimated the inertia of the existing system. When three-quarters of a market is dominated by a handful of corporate "Gosplans" that share the same pathological organizational culture and follow the same "industry trends," Gosplan can be pretty profitable.

But another part of the answer may be that the stuff Peters talked about actually was adopted to a large extent; it's just that the contrast between the new and old ways of doing things wasn't nearly as great as he imagined, and that what's called the "self-directed team" can be integrated quite nicely into the old hierarchy without anywhere near the revolutionary upheaval he expected.

Peters himself made it clear that he wasn't opposed to bigness, as such; he just wanted to simulate the advantages of smallness in the context of a large corporation. And he also made it clear that his prescriptions for eliminating middle management, transforming the corporation into a loose network of self-directed teams, and "outsourcing everything" would take place within a mercantilist framework of corporate headquarters that retained central control of "intellectual property," branding, and finance, as well as the price-setting power that comes from coordinated buying and selling. Nike has taken the principle to its logical conclusion, outsourcing all the production to an archipelago of "independent" sweatshops, while retaining control of corporate finance and legal possession of the Nike brand-name. It's pretty hard to miss the fact that the world in which Peters saw his ideas being implemented was a world built by Tom Friedman, upheld not by the invisible hand but by the fist of the World Bank, IMF and WTO, and the U.S. armed forces.

For the left-wing economic decentralists, on the other hand, such ideas are expected to reach their full flourishing only when intellectual property, centralized finance, and corporate headquarters themselves have gone the way of T. Rex. In other words, they will become the basis of economic organization in an economy centered on decentralized production for local markets, with production organized predominantly through consumer or producer cooperatives. Peters' prescription, as it is actually being implemented, is a way to integrate the Goths into the framework of the old Roman imperial structure and give the Empire a new lease on life.

All these management trends of flexibility, decentralization, flattening of hierarchies, and related ideas, examplify what might be the seeds of a new libertarian economic system along the lines that Kirkpatrick Sale described in the economic chapters of Human Scale. But adapted to the existing corporate economy, they are more accurately described by Parker and Slaughter in Working Smart.

Many of the stated principles, as such, might be good, if they were applied by workers for themselves, in an economy of worker cooperatives. But when they are done to workers by management, they become management-by-stress.

Indeed management theory gurus, in describing kaizen, lean manufacturing, etc., use rhetoric of empowerment reminiscent of left-wing literature on worker self-management. An especially egregious example is Tom Peters. But in practice, in the corporate capitalist workplace, they translate into relentless downsizing and speedups, and a nightmare of overwork and job insecurity. As Parker and Slaughter describe it, these fashionable management practices can be broken down into several key components (they focus especially on the NUMMI joint-venture of Toyota and GM).

The first is the speedup. Lean production systematically isolates and removes all the buffers against bottlenecks, like stockpiled parts or extra workers to fill in for absentees. The system is deliberately stressed to identify not only the weak parts, but those that are too strong.

A good example is the use of the "andon board," representing every work station. The green light means the station is keeping up. Yellow means it is falling behind. Red is a problem that requires stopping the line. Under management-by-stress, all green is not good. The idea is to stress the system, removing staffing and other resources from green areas, until a satisfactory number of yellow lights indicates that the system is operating near its absolute limits. [pp. 24-28]

A second key aspect of management-by-stress is the just-in-time, or demand-pull approach to production. This is another idea that, if developed in the directions described by left-wing decentralists like Barry Stein, Dave Pollard, and Michel Bauwens, would be a good thing. But adapted to the capitalist workplace, the dark side of its dialectical nature is revealed. The idea is to reduce inventories of finished and unfinished goods to an absolute minimum. The lack of a cushion helps to stress the system, pressuring those in weak spots to superhuman efforts to catch up. Those causing bottlenecks are isolated and identified, and subjected to hellish pressure. [pp. 25-27] The peer pressure to avoid stopping the line and attracting unwanted attention from one's coworkers or supervisor is so intense that some workers, who have trouble keeping up, will come in early or use breaks to build stocks to avoid falling in the hole. [p. 29]

The removal of staffing buffers also results in peer pressure for keeping up and against absenteeism. The worker who cannot keep up with the pace of the sped-up line creates more work and stress for those down the line. And since the work group is just barely large enough to handle its work load, there is absolutely no margin for absenteeism. The team passes on its collective stress to the recalcitrant worker. The pressure is overwhelming to work through all but the most incapacitating illnesses. [p. 29] This is reminiscent, albeit to a lesser degree, of the colorful stories veterans tell about the practice of collective punishment in the military, and the "blanket parties" organized for the individuals who made a unit suffer.

In short, the system is not bufferless at all. The workers themselves are the buffers, at little or no cost to the company. [p. 69]

Glitches are inevitable, anywhere. Could a system that really had no buffers to deal with these glitches be as productive as this system is? Lean production does remove or sharply curtail those buffers that add significant cost--a stock of work-in-progress, back-up machinery, extra workers, or spare time--but it replaces these with an alternative. The real buffers in bufferless production are the workers, who are expected to put out extra effort to maintain production despite the unavoidable glitches.

If the just-in-time system makes a part shipment late and the team leader has to run to get it, that's the job. If overtime is required and workers have to forego personal plans, that's the job too. Using workers as the shock absorbers of the system costs management little (except for workers compensation claims), but it can be very unhealthy for the human element. [p. 80]

If you ever had any doubt that the term "human resources" reflects a conscious agenda, this should dispell it. They view us as another resource to be used until it falls apart, and then replaced. And Fish! Philosophy is another way to deal with problems of exhaustion and shattered morale on the cheap: to get a little more out of us before they have to replace us, without having to give us anything extra in return.

A third aspect of management-by-stress is what Parker and Slaughter call "super-Taylorism," with workers pressured to time-study themselves. [p. 27] This is what the Japanese call kaizen, or continuous improvement. Although the theory stresses the empowerment of workers who are involved in the improvement process, the only real creative role for workers is in figuring out how to get more work out of less staff; the new work process, once worker input is incorporated into it, itself becomes inflexible. The basic idea is Taylor's: identify one "best practice" and then make everyone follow it without deviation. The "super-" modifier reflects the fact that management actually saves money on time-and-motion peckerheads with clipboards, instead paying hourly wage workers to think up ways to screw themselves.

And make no mistake: kaizen always means reducing staffing, not individual effort. It's a way to get more work out of fewer people. The object is to reduce man-hours enough to eliminate an entire person. As Parker and Slaughter say, "Reducing effort is not the issue, reducing jobs is.

The original Japanese inventors of all these fads were under no illusions about "worker empowerment." For all of the American management gurus' glibness about the "end of Taylorism," so effectively lampooned by Thomas Frank, the Japanese saw their techniques as the fullfillment of Taylorism, not its negation:

The original theoreticians of the Japanese production system, such as [Yasuhiro] Monden and Taichi Ohno, saw their notion of standardized work as building on the ideas of Frederick Taylor's scientific management and Henry Ford's assembly line.... Those who implemented the production system in North America were explicit that they were following in the Taylorist tradition....

Further, a central tenet underlying all the well-known quality programs, from Deming's to Crosby's, is that quality is achieved by removing variation from the process.... This in turn requires breaking jobs down to their elemental tasks, carrying out precisely defined steps and management instructs, and extremely tight process control--i.e., Taylorism.

The difference is that the collection of worker knowledge is ongoing, through kaizen, rather than a one-time event as envisioned by Taylor in setting up the system. And workers time-study each other, instead of time-study by engineers. In other words, it is democratic, participatory Taylorism. The outcome suggestions is increased management control. [p. 76] Another possible way of putting it is "Theory Y" Taylorism, or "Theory X ends by Theory Y means."

The team concept, in practice, is far less democratic and bottom-up than Peters pictures it:

In the actual operation of the plant--as opposed to the ideological hype--the main significance of teams is that they are simply the name management gives to administrative units. For the most part, if we substituted "supervisor's sub-group" for team..., understanding of management-by-stress would not suffer at all.

There is, however, some reality to the widespread notions about teams. Some teams meet and discuss real problems. When the lines move slowly enough, workers can and do help each other out. But this is most likely during initial start-up, when the "teams" often consist mainly of supervisors, engineers, and team leaders. Once the line is up to speed, jobs are specified in detail and each worker can barely keep up with his or her own job, let alone help someone else out....

When the system is running at regular production speed, team meetings tend to drop in frequency.... In other cases, team meetings are nothing more than shape-up sessions where quality or overtime information is transmitted to the workers or a supervisor announces changes in assignments.

When management taoks to itself about what makes the system work, teams, in the sense of teamwork or team meetings, are rarely mentioned. In his description of Toyota, considered the reference by many NUMMI managers, Yasuhiro Monden does not use the term "team" at all. He does describe the mandatory Quality Control Circles made up of "a foreman and his subordinate workers." In the entire 230-page book explaining the production system, discussion of these circles totals seven pages, and much of this discussion covers the suggestion system and its rewards.

Similarly, John Krofcik, an MIT researcher and a former quality control engineer at NUMMI, lists teams as one of the reasons for NUMMI's success. But in describing them, Krafcik discusses only the supervisory duties of team leaders... and the peer pressure against absenteeism, not any supposed team powers or problem-solving functions. [p. 35]

And even when the teams are fully functioning as in theory, their decision-making domain is heavily circumscribed:

NUMMI management tries to guide its Problem Solving Circles by placing boundaries on what the circles may address. Included in the untouchables list are: Company Operating Principles, Human Resources Policy and Rules, Supplier Selection, New Model Design, Sales and Marketing Policies. The message is that creativity means finding ways to meet targets established by management [emphasis added]....

If workers may not address those areas--the ones that would actually give them some say over what happens in and to the company--what's left of workers' power? Well, the Problem Solving Circles have the power to kaizen. If "company operating principles"--i.e., leanness--are off limits, how are circles to address problems of workload or understaffing? [pp. 70, 77]

The answer, clearly is that they are not.

So why does the reality described above differ so sharply from the gushing, quasi-syndicalist rhetoric of management theory gurus like Peters? Two words: "Potemkin village." Or maybe three, if you throw in "dupe."

This chapter points to an unlovely picture of life in a management-by-stress plant. It contradicts most of what is said in the glowing accounts of the team concept in the popular media. Where do these accounts come from?

Many stories about how workers feel about life in management-by-stress plants are based on reports of company officials, union officers, or consultants who have some vested interest in the programs' being declared a success. Some very positive descriptions are based on interviews at the time the plant was starting up. As we have described earlier, the conditions, the role of teams and teamwork during the start-up period are transformed by the time the lines reach full production speed. Some reports are based on testimony by workers specially selected by the company to meet reporters. The distortions are then compounded by authors who know little about what life is like in a factory. [p. 37]

So overall, the lesson seems to be that a revolutionary change really did take place in the '90s and the first years of the 21st century. Seen in terms of Peters' liberatory rhetoric, the team concept has meant little practical change. But seen in terms of "management-by-stress," a great deal of change--mostly for the worse--has occurred. Radically downsized workforces have been pushed to their limits, with greatly increased stress and turnover and diminished morale. Although Peters' rhetoric, taken at face value, sounds like something out of Kropotkin or Kirkpatrick Sale, implemented within the framework of a corporate economy it is in practice a system for tightening management control.

But this is not to say that these fashionable management theories are inherently worthless. Just reading Peters' work by itself (especially Thriving on Chaos), without considering the utterly evil institutional environment in which his ideas have been adapted, is almost as exilirating a read as Kropotkin's Fields, Factories and Workshops. As with Kropotkin, many of the ideas he discusses sound like the seeds of a possible libertarian economy, if they were adapted to an overall structure of cooperative ownership and decentralized production for local markets.

And as I've already pointed out, many theorists of the alternative economy have adapted the same ideas to genuinely libertarian structural conditions. Even Parker and Slaughter concede some value to the ideas themselves, if workers had more control over how they were adopted in practice. For example, lean production could be designed to achieve genuine efficiencies without unduly stressful conditions; one possible adaptation would be to supplement the lean, just-in-time model with or flying squads to help work stations with problems, or with a small floating pool of extras to fill in for absentees.

Another example of how the same concepts might be applied differently, if used to empower workers instead of bosses, is kaizen. Instead of (as we saw above) kaizen being used to eliminate jobs rather than reduce the effort required, it might be used for the reverse: as a way for workers to make their own jobs easier. It would be a case of "labor-saving technology," for once, living up to its name.

In a decentralized, cooperative market economy, the built-in conflict of interest currently involved in "process improvement" would disappear. With management representing those doing the work, instead of those trying to get more out of them, most of the so-called "agency dilemma" would be straightened out as cleanly as the Gordian knot. "Change" would cease to be something imposed from above, by those with fundamentally different interests, and would instead consist of decisions made by workers concerning their own work.

Depending on whose power framework these ideas are incorporated into, the resulting world can be either as hideous as an iron-heeled cyberpunk dystopia (Stephen King's The Running Man and Marge Piercy's He, She, and It are pretty effective extrapolations of the kind of world our corporate technofascist overlords are trying to build for us), or as humanly appealing as the 21st century England of William Morris. Either "all will be well, and all manner of things will be well," or the future will be a boot stamping on a human face forever. Or maybe we'll just muddle through somewhere in between, with them trying to enslave us but not quite getting off with everything they want.

But I don't think our corporate masters can keep their grip on the world, and I don't think they can even just muddle through for many more decades. Their state-subsidized economy is generating costs faster than they can externalize them on the rest of us, and it's headed for the breaking point: Peak Oil, the debt crisis, overbuilt highway structure crumbling several times faster than money can be appropriated to repair it, soil driven to collapse by chemical agribusiness, etc. To borrow Stavrianos striking imagery from The Promise of the Coming Dark Age, the seeds of a genuinely new economy are waiting to sprout up through the cracks in the ruins of state capitalism. And when it happens, rather than new wine being poured into old bottles, we'll be using the new ideas as the fundamental organizing principles of a new economy--not to keep the old one on life support.

Agribusiness vs. Alternative Agriculture: A Compendium of Posts

Cuban Agriculture
Vulgar Libertarianism Watch, Part 13
The So-Called Green Revolution
Follow-Up on Green Revolution
A New Spin on Stakeholder Society
A Real Green Revolution (and You Don't Even Need a Gene-Splicer)
Crunchy Con Talk
Corporate Welfare for Third World Agribusiness
Agribusiness and the State
The Free Market: Agribusiness's Enemy Number One

Contract Feudalism and Labor Issues: A Compendium of Posts

Contract Feudalism
Them Pore Ole Bosses Need All the Help They Can Get
Claire Wolfe: Dark Satanic Cubicles
Thomas L. Knapp Joins the One Big Union
Capitalism and Un-Freedom (More on Contract Feudalism)
Commodified Rebellion for the Wage Slave
May Day Thoughts: Individualist Anarchism and the Labor Movement
The Panopticon: Not Just For Prison Any More
An End to Labor's Long Retreat?
Still More on Contract Feudalism
Stumbling and Mumbling on Contract Feudalism
Face Time, Extrinsic Measures, and Contract Feudalism
Some Good Material on Labor Issues
Ehrenreich on Unions
Brad DeLong on Labor's Long Retreat
Contract Feudalism Update
Neoliberal Reaction and the "Workhouse Economy"
A Labor Day Statement by the Syracuse Green Party
Claire Wolfe vs. the Job Culture
Vulgar Libertarianism Watch, Part 14
Second Follow-up on Vulgar Liberalism: More on Labor Unions
Them Pore Ole Bosses Need All the Help They Can Get (different post)
Another Free-for-All: Libertarian Class Analysis, Organized Labor, Etc.
Cheer Up or Get Sent to the Cornfield
Inequality and Work Hours
Stamping Out Ownlife
What's Good for the Goose...
Vache Folle on Fish! Philosophy and "Negativity"
Empire of the Rising Scum (Apolgies to R.A. Wilson) (actually Robert Shea)
New Wine in Old Bottles
Professionalism as Legitimizing Ideology
You Won't Have Your Sweatshop Employers to Kick Around Anymore
A Couple of Good Items on Killing the Job Culture
Blaming Workers for the Results of Mismanagement
I Wish You Wouldn't Be So Good to Me, Cap'n (or, Executive Compensation and Ass-Kicking)

Decentralist Economics and Alternative Social Institutions: A Compendium of Posts

Intermediate-Scale Technology
A Bank for Co-ops
Pollard: Power and How to Topple It
Mutualism and the State
News From Nowhere: Update
Mutualizing Social Services
Building the Structure of the New Society Within the Shell of the Old
Public Services, "Privatized" and Mutualized
Kunstler: The Long Emergency
The Revolution is Not Being Televised
The Right to Self-Treatment
What is Counter-Economics?
Report from Emilia Romagna
Northeastern Anarchist on Dual Power Strategy
Dan Swinney Article on High Road
Cooperative Networking
Put the Public in "Public" Hospitals
Cuban Agriculture
Cooperative Economics at BC Politics
Dan Crawford: Sustainable Communities
Could You Live Without Money?
Dave Pollard et Al: Open Source World
Mike Morin: "Rearranging Our Economic System[s]"
Dave Pollard: Natural Enterprise
Emilia Romagna: Can It Work in Illinois?
From Pollard's Mouth to God's Ears
We Don't Need Them
Cooperative Pooling of Capital
General Idea of the Revolution in the 21st Century
Making Ourselves Ungovernable
Making Ourselves Ungovernable, Part II
P2P: New Economic Paradigm?
The Two Economies
Still "Building the Structure of the New Society...."
The Solidarity Economy
A World Without Bosses?
Varieties of Voluntary Economy
Susan Witt on Independent Local Economies
Reality as Subversion
A Real Green Revolution (and You Don't Even Need a Gene-Splicer)
Distribution of Capital and the Pull Economy
Cooperatives as Schools of Self-Government
Commons-Based Production and the Collapse of Exchange Value
Dick Martin on Federation
P2P, Cooperatives, and the Counter-Economy
Unplugged
Venture Communes: Telekommunisten
Per Bylund: Building the Structure of the New Society Within the Shell of the Old
Community-Supported Manufacturing
Klassen on Rural Homesteading for the "Time of Troubles"
Doc Searls on the Intention Economy
A Market Without Capitalists
Larry Gambone on Corporate Welfare Reform
Pollard on the Two Economies
Flexible Manufacturing Networks and the Cooperative Economy
Parecon vs. Market Socialism
Pollard on the Two Economies
Flexible Manufacturing Networks and the Cooperative Economy
Michel Bauwens: An Economy Organized on P2P Principles
Michel Bauwens: P2P as Organizing Principle for the Physical Economy?
E.F. Schumacher vs. Liberal Technocrats on Third World Development
When Do Co-ops Work? When They're Allowed To
Levelling the Playing Field for Local Enterprise

Weekly Digest

Police State

*Jacob Hornberger assures us it already has happened here (via Arthur Silber):

"Well, then, where are the mass round-ups, and where are the concentration camps?"

Again, people who ask that type of question are missing the point. The point is not whether Bush is exercising his omnipotent, dictatorial power to the maximum extent. It’s whether he now possesses omnipotent, dictatorial power, power that can be exercised whenever circumstances dictate it — for example, during another major terrorist attack on American soil, when Americans become overly frightened again.

"...Within the Shell of the Old"

*Our Word is Our Weapon on the Millennium Villages Project. "Bottoms Up: The Millennium Village Project." "Millennium Villages." "More on the Millennium Villages Project."

*Brad Spangler suggests a left-right money crankery fusion, between hippy-dippy LETS systems and the paranoid right's hard money movement.

*Via Ron Bailey at Reason Hit&Run. Rickard Falkvinge of Sweden's Pirate Party (in the contest of the Relakks untraceable internet service, or "darknet") on the non-viability of copyright fascism without the surveillance state:

The only way to enforce today's unbalanced copyright laws is to monitor all private communications over the Internet. Today's copyright regime cannot coexist with an open society that guarantees the right to private communication.

*Tim Kitchens, at Steal This Brand:

The core mutual marketing idea is to design organisations in response to multiple stakeholder interests, and then devise and support processes that can fulfil those complex desires.

Balanced organisations, win:win organisations, sustainable organisations...call them what you will...all the exciting new business models today depend upon restructuring value-chains in more empowering ways to be stakeholder responsive, from the outset.

Mutual Marketers would start an HR strategy by asking ‘what do our ideal employees we want to target want from their career? Now let’s create an organisation to fulfil that aspiration…’

*Kitchens also posts the central principles of mutual marketing. My favorite:

Companies, owned by shareholders seeking short-term profit and delegating authority to self-serving managers, will never act in the interests of their customers. Legally, and morally, they cannot.

The only viable buyer-centric organisational form is the mutual – the buying co-operative, directly owned by its members….

Here, my campaign banner is Mutualism – the particular form of socialist libertarian anarchy esposed by Proudhon.

*Alexander Kjerulf lists the benefits of "low rent living," among which my favorites are:

1: Freedom to leave a bad job
When a job doesn’t make me happy, I can quit without worrying about the money....

5: Freedom to work less hours...

7: Peace of mind
I spend almost zero time and energy worrying about money - it’s just not an issue.

*Thomas Greco reports on a Vermont conference organized by the Schumacher society, Complementary Currencies: Money for Local Living Economies.

Land Stuff.

*A paper on land rights in Africa, via Our Word is Our Weapon.

*Via Flagrancy to Reason. Title reform in Phnom Penh worked just like De Soto said it would. Newly titled land in urban squatter settlements is selling for up to $ a square meter--a potential gold mine for the destitute folks living there, right? Except for one thing--twenty-odd thousand of the squatters were burned out or otherwise evicted, and resettled elsewhere, and the newly titled prime real estate wound up in the hands of plutocrats.

*"Let Them Have Tractors: New Steps in Bolivia’s Agrarian Reform. Evo Morales Administration Hands Over Land and Equipment to Thousands of Peasant Farmers as the Landowning Right Wing Arms for Battle."

Corporate Welfare

*"Who Killed the Electric Car?" GM and the EV1.

*Reason Hit&Run recently announced a debate, pitting the worthy Tim Carney against someone from the AEI, on whether big business is friend or foe of big government.

*Adem Kupi provides a left-libertarianish quote from Bastiat on the tendency of business, when it participates in government, to conspire against the public. Conversely,

[Competition] is the basis of true communism, of true socialism, and of that equality of wealth and position so much desired in our day...

*And as Kupi also points out, we only wish society was a pyramid.

The difference in effective wealth between a DuPont or Rockefeller and a successful trial lawyer is greater than the difference between that trial lawyer and a homeless bum. Far greater. The power curve looks like a capital J. I feel safe in saying that no one reading this is on the vertical part, or even on the curvy part, most likely. (which starts when you're dealing with multi-millions, I think)

We're almost all proletarians, here. Fighting the upper middle class as a class enemy is pointless.

*While we're on the "we're almost all proletarians" theme, Chris Dillow of Stumbling and Mumbling explains his existential definition of working class:

There's a simple test of whether you're working class or not. It hangs on two questions. Could you lose your job because of a decision by a single person (or small group)? Are you worried by this? If you answer "yes" to both, you're working class - because you're dependent upon your work for a living, and because you lack control over your attachment to work.

A commenter there produced this great quote from E.P. Thompson:

Sociologists who have stopped the time-machine and, with a good deal of huffing and puffing, have gone down to the engine-room to look, tell us that nowhere at all have they been able to locate and classify a class ... Of course they are right, since class is not this or that part of the machine, but the way the machine works once it is set in motion.

Vulgar Libertarianism

*A couple of good anti-vulgar libertarian rants by Lady Aster. First:

A great number of libertarians think of liberty as an ideology for red-blooded natural aristocrats and have an unstated belief that women and non-whites are not inclined to value freedom by nature. I think it's more like women and people of colour are repulsed by the clueless and callous attitude radiated by established libertarian culture. What does it say, gentlemen, when African Americans and women got up and fought two respective social revolutions in the last century and yet don't see any reason to join yours?

If the main message libertarians have for people of colour is 'your situation is the result of natural inequality and white people aren't responsible', then don't be surprised if they tell you to fuck off. You idiots. Why don't you just join welfare statism's central recruiting office?

Second:

Support plans for non-state community actions such as (in passim) those of the Los Angeles South Central farmers. Stop acting like anyone who cares deeply about social injustice is about to summon a socialist bogeyman and learn, dammit, to care yourself. Don't sneer down your nose at the culture, experiences, or values of the poor. Listen to them, and assume they will be right about at least some things they know more about than you do. And don't you dare blame them for using a welfare
system to stay alive.

Poor people deal with hateful, indifferent, and manipulative bureaucrats every week. They don't have to be told what the welfare state is like- but Republcans and Democrats alike tell them their choice is between the welfare state and being thrown to the wolves. Show them the market isn't a den of wolves

Weekly Digest

Another extra. I should finish working through the backlog with another one on Thursday, and get into a regular schedule of weekly digests after that.

A nice Murray Bookchin obit by Jesse Walker, who quotes him from the 1979 Reason interview by Jeff Riggenbach:

People who resist authority, who defend the rights of the individual, who try in a period of increasing totalitarianism and centralization to reclaim these rights -- this is the true left in the United States. Whether they are anarcho-communists, anarcho-syndicalists, or libertarians who believe in free enterprise...I feel much closer, ideologically, to such individuals than I do to the totalitarian liberals and Marxist-Leninists of today.

Eugene Plawiuk writes on the shift toward decentralized, organic, community agriculture in Cuba after the cutoff of Soviet economic aid. I've blogged about it myself. When the USSR was still a source of life support, Castro preferred the Soviet model of large-scale, mechanized factory farms. The cutoff of Soviet aid resulted in a steep decline in the Cuban diet--followed by steady improvment as sugar cane was replaced by small-scale horticulture for local consumption. Could it be that the old Soviet bloc was following a "neoliberal" model of its own, encouraging satellites to specialize in export crops for the sake of the "socialist community"?

As Stephen King's Gunslinger would say, the world has moved on. My book is no longer the theme of the latest issue of Journal of Libertarian Studies. But the good news (or additional good news, some might say) is that there's a lot of good new stuff, so check it out. And the new practice of immediately publishing the new issue to the web, which began with the recent symposium issue on my book, continues with this issue.

Bob Murphy has an article at Mises.Org in defense of agribusiness. In response to a woman who complains of the inefficiency of shipping produce all the way around the world when it can be grown in the same community where it's consumed, he writes:

After all, isn't it a wondrous achievement of the market economy that costs of shipping are so low that we can enjoy goods delivered from all over the globe?...

Well it's true, I don't really know how many calories of fuel it takes, but I bet the owners of the shipping companies — you know, the ones who reckon that it's cheaper to ship spinach from China than from New Jersey — have a pretty good idea. (After all, they have to buy the fuel.)

Anyway, what's Taylor's point? Absent government interference, market prices reflect the different opportunities for resource usage in various lines....

Taylor, and you other critics of the spontaneous outcomes of the market economy, please do us all a favor: Go read Henry Hazlitt's Economics in One Lesson.

Let's see: low shipping costs an "achievement of the market economy".... "absent government interference".... "spontaneous outcomes of the market economy".... Yep, all the signs are there. What we've got here is a massive exercise in question-begging.

Carlton Hobbs, in the comments to a Mises Blog post linking to the Murphy article, is so impolitic as to quote ADM's Dwayne Andreas, the patron saint of an agribusiness industry about as "free market"-oriented as Big Pharma or Boeing and McDonnell-Douglass.

So much for those who say "Smash the State!" and then go back to singng "How great art thou Monsanto." How foolish art thou farmers' markets. If you want to know why it is cheaper to get spinach from China than from your neighbor, read "Everything I Want To Do Is Illegal"

Quasibill, in the comments to my "Outsource Everyone But the Pointy-Haired Bosses" post, directed me to a hilarious exchange in which an MBA took umbrage at the same article I linked in the post. This time, it was Jeffrey Tucker who linked to the article at Mises Blog. After a series of comments sniping at MBAs, an offended MBA jumped into the fray. Scroll down to the comment by MBA Grad. To quote quasibill's description, MBA Grad listed, among the insights he gained from an expensive business school education, a bunch of platitudes that any Mises Blog reader could have told you for free. Then he wrote:

My compensation is now better than triple what I earned pre-MBA (which was itself above average), however, I know that my employer will drop me in a heartbeat for some other bright kid if I fail to perform to their expectations.

Employers pay a premium because they value whatever it is that MBA grads have that the general population doesn't. Otherwise, they'd save themselves a whole lot of cash, and hire from high-schools or community colleges.

So, next time you want to complain that MBAs are stupid and overpaid because you happen to have met a few who fit that description, rethink your argument in a free-market context before spouting overgeneralized opinions.

Ahem. Well, it might just be that the institutional structure and culture of MBA Grad's employer result from something besides a free market--that his skills are desireable, rather, in the Gosplan-like atmosphere of an enterprise bloated (thanks to state intervention in the market on behalf of big business) far beyond the optimal size for efficiency. The MBA's skills of milking organizations to inflate quarterly returns, of shifting finances between divisions of an organization based entirely on such returns, and imposing arbitrary cuts on entire divisions or categories of productive labor, with no idea of the internal productive workings involved, are quite similar to the skills of a state finance apparatchik in a planned economy. Robert Jackall, in Moral Mazes (which I reviewed last month), admirably described the effects of the MBA Disease in the bureaucratic culture of the large corporation.

Iceberg has a great post on a corporate welfare deal in New York, fascist economics passed off on the taxpayers as "privatization" of roads and bridges.

Elsewhere on the corporate welfare front, Sheldon Richman writes at FEE:

Libertarians should revise their attitude toward retailers that collude with government in land theft and other forms of corporate welfare. They are shoulder-deep in state privilege, enjoying all the creative financing and tax schemes their political friends can cook up. They are so integrated into the local and regional economic-planning establishment that they compromise their private-sector status. That should make laissez-fairists uncomfortable.

Alexander Kjerulf, at Positive Sharing, posts on Rosenbluth International, a corporate travel agency whose top priority is keeping its employees happy. CEO Hal Rosenbluth found that happy employees were the key to providing the best possible customer service. As counterintuitive as it seems, if you treat people like shit, all the corporate motivational programs in the world won't make them enthusiastic about doing a good job. And if you downsize service workers and then double the work load of the survivors, even Hallmark Cards can't write enough smarmy mission statement rhetoric to prevent lousy service. During the near-collapse of the travel industry after 9-11, Rosenbluth was hit hard. But layoffs were a last resort, after across-the-board pay cuts that included senior management. And even after the layoffs, Rosenbluth made rehiring laid off workers a top priority.

Mike O'Mara, on the geolibertarian-leaning ProLiberty Democrats list, links to a great article by Mason Gaffney: Land as a Distinctive Factor of Production.

According to Fred Foldvary, the "natural minimum wage" in a free market is determined by the alternative income a worker can expect from self-employment. One such source of alternative income is subsistence labor on cheap marginal land. Another is self-employment in low-overhead jobs like peddling and odd jobs. Anything government does to make cheap land scarcer and less accessible, or to set up entry barriers (i.e., licensing) for cabs, errand services, peddling, and the like, artificially reduces the minimum wage below its natural level.

Patri Friedman links to B.K. Marcus' classic "Straw Men and Ham Sandwiches," with this wonderful quote:

political capitalism (which we pro-capitalists sometimes call mercantilism, corporatism, state capitalism, crony capitalism, or even fascism), is something we and the anti-capitalists can agree on: it is the exploitation of the productive class by a parasitic class. We might even surprise them with our sample list of parasites: defense contractors, the banking cartel, the steel industry, big agribusiness, Halliburton … There is a persuasive power in joining the leftists’ rants against privilege once you’ve insisted that the term they mean is political capitalism. Similarly, it is easier to convince them to open their minds to the potential virtues of economic capitalism than it is to promote only ‘capitalism’ without the distinguishing modifiers.”

B.K.Marcus announces that The Market for Liberty, by Linda and Morris Tannehill, is available online. He also links to another great online resource, Robert Higgs'
"Quasi-Corporatism: America's Homegrown Fascism."

Finally, a great post at Oligopoly Watch on the "Patent Protection Racket," by which giant corporations buy up patents in bulk with no intention to work them, just so they can collect tolls on anyone who does.

Weekly Link Digest, Part Deux

Lots of stuff in the hopper, so here's a twofer.

Vulgar Liberalism Watch.

Robot Economist at Freedom Democrats quoted a soccer momish advocate of free grad school education, on the grounds that the job market is so competitive a bachelor's just doesn't cut it. In response, I wrote:

The only solution to income polarization... is more income polarization. The main effect of subsidized college education was to dumb down college education to the previous level of high school education, while making a batchelor's degree obligatory for jobs that previously required a high school diploma. If graduate education is similarly subsidized, we'll see grad schools eagerly dumbing down standards to attract the money, and pretty soon everybody in America will have to have an M.A. to do any job that pays better than dishwasher. Subsidized higher education has simply made technical manpower cheaper to business, and encouraged it to adopt capital-intensive, skill-intensive production models that create technological unemployment for the uneducated. Given that subsidized education is one of the main reasons for the two-tier economy, advocating even more subsidized education in the belief that it will reduce income disparity is rather, well, shitheaded.

Chris Dillow at Stumbling and Mumbling has a similar (if more polite) reaction to Deepak Lal's pollyannish prescription of "more school" as the solution to technological unemployment.

Meanwhile, via Logan Ferree at Freedom Democrats, free higher education is also the centerpiece of Uber-Soccer Mom Hillary's middle class agenda.

If all this gives you nightmares of a monster with "the body of Leviathan and the head of a social worker," a good antidote would be Joel Schlosberg's post on a documentary about the free school movement. And if that's not enough, iceberg (at lettuce have peas) quotes John Taylor Gatto:

Alexander Inglis's 1918 book, Principles of Secondary Education, ... breaks down the purpose - the actual purpose - of modern schooling into six basic functions...:

1) The adjustive or adaptive function. Schools are to establish fixed habits of reaction to authority. This, of course, precludes critical judgment completely. It also pretty much destroys the idea that useful or interesting material should be taught, because you can't test for reflexive obedience until you know whether you can make kids learn, and do, foolish and boring things.

2) The integrating function.... People who conform are predictable, and this is of great use to those who wish to harness and manipulate a large labor force.

3) The diagnostic and directive function. School is meant to determine each student's proper social role. This is done by logging evidence mathematically and anecdotally on cumulative records....

4) The differentiating function. Once their social role has been "diagnosed," children are to be sorted by role and trained only so far as their destination in the social machine merits....

6) The propaedeutic function. The societal system implied by these rules will require an elite group of caretakers. To that end, a small fraction of the kids will quietly be taught how to manage this continuing project, how to watch over and control a population deliberately dumbed down and declawed in order that government might proceed unchallenged and corporations might never want for obedient labor.

At Info All, Paul Knatz writes on servile education:

Kleptocracies don’t want citizens learning from experience on their own, and the kleptocracy’s solution is a state-run school system: learn what the state-appointed teacher says when the state-appointed teacher says it....

...[T]he individual most severely punished may be the one who learned something before the teacher gave the command.

And (via Ender's Review) as a final raspberry to the publik skools, Retta Fontana writes:

The main purpose... of government schools is to train young people to tolerate boredom, repeat other people’s answers to rote questions, spy on their parents, absorb “groupthink,” follow orders and most of all, to become good citizens and, through peer pressure, to conform.

Via Indie Castle, Bill Kauffman (in a review of Jeff Taylor's Where Did the Party Go?) contrasts W.J. Bryan to H.H. Humphrey:

Restating the Jeffersonian motto "Equal rights for all; special privileges for none," he denounced "ship-subsidy grabbers," "trust magnates," and "the privilege-hunting and favor-seeking class." (Predictably, his campaigns were chronically underfunded.) It might seem odd that Taylor calls a candidate who advocated nationalization of the railroads a believer in "a laissez-faire economy," but Bryan himself professed it: "The safety of our farmers and our laborers is not in special legislation, but in equal and just laws that bear alike on every man. The great masses of our people are interested, not in getting their hands into other people's pockets, but in keeping the hands of other people out of their pockets."...

Humphrey, twisting the Jeffersonian slogan, desired "special privileges for all," cracks Taylor. An "exponent of paternalistic statism," he never met a welfare progam he didn't vote for no matter if the beneficary was Lockheed, Boeing, or a single mother. He stated confidently that "big corporations are a source of strength and economic vitality."

Brad Spangler points to evidence that corporate campaign money is shifting toward the Democrats. That suggests to me a possible shift back toward corporate liberalism among the Power Elite--perhaps because the dominant crisis tendency in state capitalism has shifted from the under-accumulation crisis of the '70s, back toward the default mode of over-production crisis.

At The Superfluous Man, John Markley comments on the "great irony"

that "anti-corporate" liberals and leftists are usually the most vocal advocates of the very interventionist state that makes the manipulation and exploitation that Richman describes possible. They probably do more than anyone else to provide the necessary ideological support for the state powers that the rich and powerful use for their own ends.

He mentions the liberal rush to defend Kelo. And, I'd add, liberals also fought challenges to federal preemption of state medpot laws on Tenth Amendment grounds because--you guessed it--such preemption depends on the same creative reading of the Commerce Clause as the rest of the regulatory state. If John Ashcroft can't kick down your door for smoking a joint, the Four Horsemen might come back to the Supreme Court.

Markley observes, in the same vein,

It is an amusing (or depressing, depending on my mood) irony that many liberal/"vital center" types who talk about how statism protects us from the depredations and exploitation of big business are the same people who consider the national government highway system a glorious achievement that proves that demonstrates the state's wisdom and benevolence. The people who rage against huge corporate chains are largely the same people who cheer for the many of the government programs that make the huge chains so powerful in the first place.

And Joshua Holmes takes on the latest vulgar liberals to suggest the Bush Administration represents a "free market libertarian" coup:

Ooh, you liberals are so smart. You caught us! That’s right, we sneaked a full-throated, red-blooded libertarian into the White House while you guys were laughing it up about his language blunders. And now he’s implementing the libertarian agenda: tax cuts for the rich and pork for the rich!

Despite the fact that Nixon, Reagan, Bush, and Bush the Younger have all presided over massive increases in federal spending, proposed and signed legislation expanding the welfare, warfare, and regulatory state, and played the Great Game in various regions of the world, the real problem is that they’re all closet libertarians.

Fiscal Crisis of the State.

Jomama reports:

Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying....

Washington is not likely to produce more money to build roads. The federal highway fund — which will have a balance of about $16 billion by the end of 2006 — will run out in 2009 or 2010, according to White House and congressional estimates.

Meanwhile, at Independent Country, James Wilson speculates on the direction the economy might have taken without corporate welfare for railroads, trucks, and airlines.

Health Care: Seller's Market

For a competitive market to work optimally, information on the competing choices and their prices has to be freely available--a condition the cartelized health system is designed to prevent. At Info All, Paul Knatz discusses absence of such information in health care:

The good Samaritan finds a homeless guy run over in the road. He takes him to the hospital. They put the guy in IC, keep him a month. Who gets the bill? Was there a menu? Was the guy conscious when the choices were made?

The hospital knows perfectly well that some patients won’t be able to pay. So they jack up all the prices. Get it where they can, when they can, pass the rest to the public. What? Do you think the hospital owner should be at risk?

But the kleptocracy is rigged so that enormous pressure will be put on the out patient to pay -- for what he never ordered, never knew the price. The guy is in hock till he pays, permanently screwed if he doesn’t.

Memed

Jeremy Weiland at Social Memory Complex has tagged me with another book meme; apparently these viruses mutate and reinfect the same host repeatedly. Ah, well. Here goes:

One book that changed your life. That would have to be Human Scale, by Kirkpatrick Sale. The little factoids in the economics section (like corporate welfare sometimes exceeding total corporate profits, and Ralph Borsodi's findings on the greater efficiency of many forms of home production), and the material on decentralized production technology, got me started on the lines of economic thinking I've followed ever since.

One book that you have read more than once. The Illuminatus! Trilogy (Shea and Wilson) and the Fall Revolution trilogy (Ken Macleod).

One book that you would want on a desert island. Way too hard to narrow down. Probably an encyclopedia or some similar reference work. Or some really big canonical tome like the Bible or Shakespeare's collected works or Grimms' Fairy Tales.

One book that made you laugh. Any of the Dilbert management books.

One book that made you cry. Goncharov's Oblomov, believe it or not. I read it for a Russian lit class, and got all misty-eyed when he died. On the other hand, I laughed myself silly watching DiCaprio go under in Titanic.

One book you wish had been written. Probably SEK3's Counter-Economics.

One book you wish had never been written. Right now, for reasons I can't go into, it's Fish! A Remarkable Way to Make Your Employees Happy About Being Treated Like Shit.

One book you are currently reading. A bunch of stuff on industrial sabotage, asymmetric warfare, fourth-generation warfare, netwar, and the like.

One book you have been meaning to read. Capitalism, by George Reisman. No, really.

Now tag five people. Uh, nope, nope, nope--ain't agonna do it.

Weekly Digest

Since I've got a lot of stuff backlogged in the hopper, the next couple weeks' digests will include large amounts of old stuff. I couldn't just delete it all, though, because it's really good.

Ecodema on some 180 closed factories in Argentina, reopened and run by workers. They employ over ten thousand. Also at Ecodema, a link to the international Committee on Workers' Capital, which promotes the democratization of capital.

The future is unwritten links to an anarchist critical of Hugo Chavez from the Left: "Socialism to the Highest Bidder."

The biggest consequence of Chavismo is that it has relegitimized the state and its political class, at the total cost of all gains made in extra-parliamentary struggle over the course of the 90s.... [T]he crisis of the last decade created a situation where only a non-traditional politician using leftist rhetoric could possibly have salvaged the crumbling state.

At Strike the Root, Fred Reed on why universities should be abolished:

To the extent that universities actually try to teach anything... they do little more than inhibit intelligent students of inquiring mind.... The professor’s role is purely disciplinary: By threats of issuing failing grades, he ensures that the student comes to class and reads certain things. But a student who has to be forced to learn should not be in school in the first place. By making a chore of what would otherwise be a pleasure, the professor instills a lifelong loathing of study....

Perhaps once universities had something to do with the mind, the arts, with reflection, with grasping or grasping at man’s place in a curious universe. No longer. Now they are a complex scam of interlocking directorates. They employ professors, usually mediocre, to sell diplomas, usually meaningless, needed to get jobs nobody should want, for the benefit of corporations who want the equivalent of docile assembly-line workers.

I missed Richard Garner's thoughtful criticism of Left-Libertarian or Left-Rothbardian class theory when it first came out. And Walter Block recently published his own critique of the Left-Rothbardians (focusing on Roderick Long and Charles Johnson), along with Hoppe and Rockwell and others on the Right, in defense of his own version of plumb-line libertarianism.

Eric Husman of Grim Reader has a good series on management theory: "The New Workplace"; "Flow"; "Putting Out"; "Federated"; "Communal--emh"; "Peer Groups"; and "Inside Contracting." Of course, everything about kaizen, self-directed teams, lean production, and the like, must be taken with a grain of salt, as I intend to argue in a future post. A lot of it sounds like what might be the seeds of a libertarian, self-managed, decentralized economy, if the structural bulwarks to authoritarianism were removed; but integrated into the existing system of state capitalism, they instead become what Mike Parker and Jane Slaughter call
management-by-stress."

Dave Pollard Roundup. He links to a Wendell Berry article on "the intrinsic wisdom of small, self-sufficient, local intentional communities."

Pollard also writes, in "Creating the Jobs We Want":

If we want meaningful work we are going to have to collaborate with the rest of the world's Disposable Citizens to create it. We are going to have to build a wholly new economy, one that will undermine and then replace (and be fiercely opposed by the beneficiaries of) the existing dysfunctional 'market' economy.

Unfortunately, he adds, the publik skools are designed largely to keep people devoid of initiative and dependent on authority figures, so that nothing like this will happen.

Pollard also posts on information flow within large, top-down organizations and on the information politics within organizations, and advocates a "peer-to-peer expertise finder" that sounds an awful lot like Illich's learning nets.

Individualist Anarchist , Free Money, Etc., Primary Sources Online

Thanks to Shawn Wilbur, the one-man scanning machine, at In the Libertarian Labyrinth. Some of this stuff, now available freely to all at the click of a mouse, I had to move heaven and earth to get on microfilm from Interlibrary loan.

Thomas Mendenhall. National money, or a simple system of finance: which will fully answer the demands of trade, equalize the value of money, and keep the government out of the hands of stock-jobbers (1816). Wilbur's commentary here.

Two translations of Proudhon's The State, one by William Greene and one by Benjamin Tucker. Comments here.

Proudhon. The Malthusians. (1848).

Edward Kellogg. Remarks Upon Usury and its Effects: A National Bank a Remedy (1841).

Kellogg. A New Monetary System.

Alexander Campbell (a follower of Kellogg). The True American System of Finance (1864). Commentary here.

William Greene. Mutual Banking (1870 edition) Commentary here.

A debate between Benjamin Tucker and Francis Abbot in the 1873 volume of The Index, on the ethics of usury. Commentary here.

A debate between Tucker and Stephen Pearl Andrews in the 1876 volume of The Index, on the importance of Proudhon's What is Property? Commentary here.

J.K. Ingalls. Work and Wealth (1878).

Ingalls. Economic Equities (1887).

Herman Kuehn. The Problem of Worry (1901), based on Greene's mutual banking work. Commentary here.

Cutting Back

Just a heads-up to let you folks know I'll be cutting things back a bit. I enjoy the contest of ideas in the blogosphere and the many interesting discussion/debates I've got into on various email lists. But trying to follow all the good stuff on the web, and post at least once a day, and keep up with all the discussion, is bringing me to the point of communications overload. I find that I'm starting to look at going online like punching a clock, and all my commitments are beginning to seem like a full-time job that leaves less and less time for long-term research work.

I couldn't go as far as Claire Wolfe originally intended with unplugging from the web. But I do plan to cut my posting down to an average of one to three posts a week--at least when I run some stuff that's already almost in final form. And on the email lists I belong to, I'll probably be doing a lot less debating and a lot more lurking.

But anyway, I'm not stopping--just slowing down. And I appreciate all of you who have taken the time to read my material and maybe leave a comment. I've sharpened my teeth in some very challenging debates in the comment threads here. I hope everyone who's found the writing here useful will continue to stop by, even if the output is reduced.

The posting here will tend to be longer, article-length pieces, more of them focused on my research in the anarchist theory of organizational behavior. There will be less posting centered on commentary on other people's posts. I don't, by any means, want to stop pointing out all the good material out there--especially in the area of cooperative economics and alternative social institutions. But I'll probably condense such links into a single weekly index post, with only brief descriptions--something like Ender's Review, or Dave Pollard's saturday links post.

And in the next few weeks, I'll try to reorganize the information already stored on this blog into a more useable form: especially aggregating favorite posts and links on the sidebar into a shorter list of subject headings.

Anyway, thanks again to all.

Labadie Collection Online

Via Shawn Wilbur. The Labadie Collection at the University of Michigan, probably the single best collection of classical individualist anarchist literature, has started an online archive of anarchist pamphlets.

Richman and Long on the Minimum Wage

Some good stuff by Sheldon Richman on the minimum wage. In a piece last month for F.E.E., he wrote:

In opposing the minimum wage we should champion the disadvantaged by emphasizing that:

Any regulation, tax, and trade restriction that stifles the formation of new businesses, and thus competition, reduces the bargaining power and self-employment options of workers -- low-income workers most of all. Less bargaining power equals lower wages.

Every intervention that raises the price of housing, clothing, food, and medicine harms low-income people most of all.

Every land-use rule and all government landholding keeps the price of real estate and rents artificially high, harming low-income people most of all.

The actions of the central bank devalue people's money, harming low-income (and fixed-income) people most of all.

A rotten education system harms the children of low-income people most of all.

Simply put, every interference with free people in the free market is first and foremost an attack on the poorest, most vulnerable in society. But notice that each intervention has its beneficiaries; together they constitute the privileged class. The chief enemy of the vulnerable is the corporate state, the system of mercantilist privilege for the politically connected that constrains the creation and diffusion of wealth.

In a follow-up blog post, he cited an old piece by Roderick Long critical of the orthodox marginal productivity theory of wages:

I certainly agree with Mises and Rothbard that there is a tendency for workers to be paid in accordance with their marginal revenue product, but the tendency doesn’t realise itself instantaneously or without facing countervailing tendencies, and so, as I see it, does not license the inference that workers’ wages are likely to approximate the value of their marginal revenue product....

First of all, most employers do not know with any great precision their workers’ marginal revenue product. Firms are, after all, islands of central planning – on a small enough scale that the gains from central coordination generally outweigh the losses, but still they are epistemically hampered by the absence of internal markets.... A firm confronts the test of profitability as a unit, not employee by employee, and so there is a fair bit of guesswork involved in paying workers according to their profitability. Precisely this point is made, in another context, by Block himself: “estimating the marginal-revenue product of actual and potential employees .... is difficult to do: there are joint products; productivity depends upon how the worker ‘fits in’ with others; it is impossible to keep one’s eye on a given person all day long; etc.” But Block thinks this doesn’t much matter, because “those entrepreneurs who can carry out such tasks prosper; those who cannot, do not.” Well, true enough, but an entrepreneur doesn’t have to solve those problems perfectly in order to prosper – as anyone who has spent any time in the frequently insane, Dilbert-like world of actual industry can testify. (The reason Dilbert is so popular is that it’s so depressingly accurate.)

A firm that doesn’t pay adequate attention to profitability is doomed to failure, certainly; but precisely because we’re not living in the world of neoclassical perfect competition, firms can survive and prosper without being profit-maximisers. They just have to be less crazy/stupid than their competitors....

I would also add that even if there are persistent problems – non-governmental but nonetheless harmful power relations and the like – that market processes do not eliminate automatically, it does not follow that there is nothing to be done about these problems short of a resort to governmental force. That’s one reason I’m more sympathetic to the labour movement and the feminist movement than many libertarians nowadays tend to be.

As Richman summarizes the lessons:

The upshot is that a worker whose marginal revenue product is more than $5.15 may still be making only the minimum. An increase in the minimum wage would benefit him. This doesn't mean a minimum-wage law is just. It relies on physical force, interferes with freedom of contract, and has the other costs noted in my original article. As for those who are underpaid (relative to their product), that problem should be addressed as I suggested: repeal of all business privileges, which narrow workers' employment and self-employment options, along with voluntary worker organizations to provide labor-market information and publicize abuses, etc.

I have a few things to add myself. First, this has a bearing on Rothbard's visceral aversion to labor unions. The things he said about labor contracts being unable to improve on the result of the employer's self-interest in a free market might be said just as well of all sorts of other market transactions. The bank that issues your credit card, arguably, doesn't benefit in the long run from dicking people around and arbitrarily changing the terms of their loan. Your landlord doesn't benefit from evicting people without good cause. But being an "at-will" borrower or tenant doesn't sound real pleasant, does it? It's a lot nicer to have things spelled out in a contract so you don't have to depend--in the short run--on the other party being smart enough to perceive his own self-interest. In the long run, self-interest may prevail. But in the long run, we're all dead. In the short run, it feels a lot more secure to have some contractural predictability built in. Anyone who's ever worked for an hourly wage knows the difference between being at-will, and knowing that you can only be fired with cause unless you're part of a mass layoff.

Second, there's a lot of neo-Marxist writing on the labor market arguing that wage discrimination makes sense because the employer benefits from cultural divisions within the work force--i.e., a divide-and-conquer strategy. Ignoring the mutual reinforcement of cultural and ecnomic factors greatly distorts reality. As Long wrote in the piece quoted above,

In the 19th century, libertarians saw political oppression as one component in an interlocking system of political, economic, and cultural factors; they made neither the mistake of thinking that political power was the only problem nor the mistake of thinking that political power could be safely and effectively used to combat the other problems.

Third, to the extent that wages depart from marginal productivity because of privilege and mercantilism--and that's one honking big extent, in my opinion--unions are useful to all workers as a means of compensating for the reduced bargaining power resulting from privilege, and thereby bringing wages closer to productivity. This means that unions are something more than (as right-wing Austrians claim) a way for privileged workers to artificially inflate their wages at the expense of the excluded.

Parecon vs. Market Socialism

At Ecodema, Tom Vouloumanos has compiled links to an extensive debate between proponents of Michael Albert's Participatory Economics (Parecon) and David Schweikart's Economic Democracy. Parecon, as I recall from reading Albert's and Hahnel's work, is a nightmare of committee meetings to decide (say) this week's output of toothpicks will be greater than last week's. Economic Democracy, on the other hand, is a form of market socialism with worker-controlled enterprises; it has a large statist element, unfortunately, with investment largely controlled by state banks.

But Schweikart is very much on the mark in his criticism of Parecon (appropriately entitled "Nonsense on Stilts: Michael Albert's Parecon") for abandoning market allocation. I can imagine, without too much effort, something like Schweikart's system with the statist elements removed and capital mobilized by voluntary means. I can't imagine anything like Parecon existing without looking like something out of Brazil.

A "Pull" model for Just Things

Stephen Herrick announces plans to try an on-demand publishing model with Just Things.

Noam Chomsky, Anarcho-Hamiltonian

Take the US. In 1750… it was one of the richest societies on earth, but it was, of course, pre-industrial. If it had pursued its comparative advantage in accordance with market principles, it would now be exporting fish, fur, agricultural products, etc.

Um, no, if it had pursued its comparative advantage in accordance with neoliberal principles, it would now be exporting fish, fur, agricultural products, etc.

Instead, it industrialized, but not by adherence to market principles. Rather, by radical violation of these principles consciously undertaken to change its comparative advantage (otherwise known as development).

But it was development in the direction of large-scale, export-oriented industry, with a generally centralist model of economic organization, and labor relations I suspect Chomsky wouldn't be too happy with.

He completely ignores a third possibility: decentralized, bottom-up development, with improved technology integrated into small-scale local economic organization.

High tariffs, subsidized internal improvements, and all that other Federalist-Whig nonsense, were not "progressive." Apparently Henry Clay was Chomsky's beau ideal of a statesman.

You Will Be Assimilated: Resistance is Futile

Via Iain McKay on the anarchy list: Tony Blair compares globalization to a process of nature:

Complaining about globalization is as pointless as trying to turn back the tide. There are, I notice, no such debates in China.

McKay quips: "Could that be because, perhaps, it is a Stalinist dictatorship?" Actually, there are some "debates" on globalization, in the form of attempts to organize independent unions or fight the seizure of communal lands for industrial parks. They just don't last long. Maybe the globalists need a good Tiananmen Square incident in this country to shut us all up.

Since Blair presumably believes in "intellectual property," he ought to be paying Tom Friedman royalties on this "globalization as inevitable process" meme.

The last I heard, though, the tide didn't require an international bureaucracy and endless government-enforced subsidies and privileges to keep advancing.

Are Citizens Tame Humans?

In my opinion that's a more apt version of Ron Bailey's question, "Are Humans Tame Apes?"

He points to the fact that domesticated animals tend to have smaller brains than their wild ancestors, and then draws our attention to the startling revelation that the human brain case seems to have shrunk on average since the rise of the state. Get it? Huh? Huh?

Domesticated animals are bred for docility and obedience. The dog is bred for loyalty to his human masters: essentially a wolf who views the human as an alpha male. And nobody wants a sheep or a cow, obviously, that's smart enough to ask "what's in this for me?" And likewise, ruling classes don't like subjects with critical thinking skills.

The next time you hear of a schoolkid diagnosed with "oppositional defiance disorder," you might stop to ask what's the agenda here.